Wake County Commissioners forged ahead Monday with a so-called “marriage” joining the county’s mental health services with the Durham Center.
Wake and Durham counties are merging their individual mental health services, called Local Management Entities, after the state Department of Health and Human Services rejected Wake’s request for its own mental health organization.
Wake and Durham LME operations begin as one entity by July 1 and will begin full operation Jan. 1, 2013. The union creates a managed care organization, known by the acronym MCO — an HMO-like organization that will manage all local Medicaid funds for mental health, developmental disabilities and substance abuse services for both Wake and Durham counties.
The county is following the state’s required timetable, which is a bit faster than officials prefer, said County Manager David Cooke.
“That’s not a lot of time,” Cooke said. “We are wanting to be successful, primarily for two groups — all the consumers and citizens that rely on the service, and then all of the employees that are impacted and have to make it work.”
The new entity will manage more than $400 million in federal, state, and local funds. The local funds will come from both Wake and Durham counties, about $23 million and about $6 million, respectively.
Johnston and Cumberland counties will be contracting services with the new organization.
“We did not think there is an advantage with contracting. We do think our advantage is in merging, and in both cases, it is a merger of both entities to both create a new entity to manage the MCO,” Cooke said.
The MCO central headquarters is expected to be placed near the Durham-Wake county line along Interstate 40. Both counties will have an individual office to serve residents.
According to material presented to the County Commissioners, the Medicaid waiver provides local flexibility in the provider network, service authorizations, rate setting, care coordination and pre-defined funding rates.
“The Medicaid waiver has got a lot of good positives that we think that will be great for our community,” said Denise Foreman, assistant to the County Manager.. “We just have to get it done in a short time frame.”
Some terms of the agreement are still under consideration by both county attorneys. Foreman said they may try to create an effective date of March 1 so that both county boards can appoint board members to the new entity and complete budget approvals by the new fiscal year start July 1.
Start-up funds for the MCO are estimated to be $8 million, with the cost proposed to be split evenly between Wake and Durham counties. The funds will pay for facilities, IT systems and staffing.
Cooke said where the funds would come from could be discussed when they create an interlocal agreement. He said most of the start-up costs will be reimbursed through Medicaid-administrated payments.
Operating funds will be provided by federal and state funds after Jan. 1, 2013. Funding is provided at a per-member, per-month rate, so that costs are known up-front.
Residents aren’t the only ones impacted by the merger. The union creates about 400 new positions, but eliminates another 110 from the county’s mental health operations, 96 of which are filled.
“So, you can imagine a lot of questions and a lot of issues from these employees of what happens with them in this transition,” Foreman said.
The hiring process for top-level management began in December because of the “aggressive schedule for getting this new organization up and running,” Foreman said.
For all positions, internal candidates will be considered first. Those not seeking jobs with the new entity will be eligible for a severance package, as long as they stay until their position is eliminated.